L&T Chiyoda Limited vs. ACIT-2(2)(1)

Parties Involved

Facts Summary

In the above captioned appeal, the only issue to be decided is whether the employees’ contribution of Provident Fund and ESI paid by the appellant is admissible as business expenditure when the same was paid on the next working day. The learned Assessing Officer and the learned Commissioner of Income Tax (Appeals) did not agree with the appellant’s contention and held that the last date for payment is 15.12.2019 and the date should be strictly followed if the amount is deductible from the taxable income. In this case, the appellant paid PF and ESI amount on 16.12.2019, whereas the last date for payment is 15.12.2019 being Sunday. Aggrieved by the disallowance by the Ld. AO and as the same was confirmed by the Ld. CIT(A), appellant filed an appeal before the ITAT with following grounds of appeal: 1) On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in disallowing a sum of Rs. 35,02,150/- being the amount of employee’s contribution to Provident Fund and Voluntary Provident Fund, in view of the Provisions of section 36(1)(va) of the Act. 2) That the Ld. CIT(A) erred in not considering the fact that the employee’s contribution to provident fund was deposited within due date under the respective Act read with section 10 of the General Clauses Act, 1977 as well as the section 4 of the Limitation Act, 1963.…

Legal Issues

• 1. Whether the employees’ contribution of Provident Fund and ESI paid by the appellant is admissible as business expenditure when the same was paid on the next working day.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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